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Wednesday, 15 March 2000
Page: 12824


Senator O'BRIEN (1:39 PM) —The government currently has two big ticket items before it. It is trying to find a way around National Party concerns to enable it to sell off the remaining public shareholding in Telstra. Of course the National Party will cave in on this issue, as it has in the past. I expect that the Democrats will also fall by the wayside eventually after coming to some sort of financial package to provide one-off short-term compensation to a community that really needs long-term adequate telecommunications security.

Once sold, Telstra will obviously focus on the high volume, high profit sectors in urban Australia and that will be at the expense of rural and regional Australia. Not only will services to regional Australia stagnate or disappear, so will the people who currently provide those services, and that will further depress regional economies. This is now a familiar pattern that has been overseen by this government since it came to office. In fact, Mr Howard and Mr Costello ensured this regional decline got off to a flying start when they came to government in 1996 through an extremely contractionary budget. Regional Australia has still not recovered from that fiscal assault.

The full privatisation of Telstra is a key aspect of the government's agenda. It wants the sale in place as swiftly as possible. While that is the fact, Telstra has already announced plans to cut some 10,000 jobs from its work force. Full privatisation would see a dramatic growth in job losses, particularly regional job losses.

I wanted to take note of the answer provided in the other place by Mr McGauran to a question from my colleague, Mr Sidebottom, the honourable member for Braddon. Mr Sidebottom actually asked the Deputy Prime Minister, Mr Anderson, whether he could guarantee, given Telstra's announcement that it planned to cut 10,000 jobs from its work force, that a Telstra call centre in Burnie would not be closed down. Mr McGauran stepped in, it seems, to protect Mr Anderson but in answering the question, he could not provide any assurances that the government would guarantee those jobs in Burnie were protected.

In the last week there has also been considerable debate about the impact on both jobs and services of the proposed merger of the Commonwealth Bank and the Colonial Bank. This merger is of considerable interest to Tasmanians because of the position of both the Commonwealth Bank and the Colonial owned Trust Bank in that state. But the likely outcome of this proposal is that a deal will be done with the government, the merger will proceed and Tasmanians will have to suffer it. Both corporate parties want the deal settled quickly and I am sure that the Treasurer will accommodate them. After all, this government, and the Treasurer in particular, are good at doing deals with the big end of town.

The chief executive of the Commonwealth Bank of Australia, David Murray, was quoted in the Sydney Morning Herald as saying that banking was now a global business. He was reported as saying that the merger of the Commonwealth Bank and the Colonial was in the national interest and he said that the merger was required to enable the bank to compete in the international marketplace.

In relation to the regional marketplaces in Tasmania and New South Wales, the only commitment Mr Murray could give was that a branch of either bank would be kept open for up to five years. Some of these communities see a future beyond the next five years and all hope that their future will include access to adequate banking services. But it appears that the future will have to be without, in some cases, any bank presence if Mr Murray has his way. Mr Murray's plan is to globalise, not regionalise, his bank. As I said earlier, I think the Treasurer will let him have his way because for the Treasurer and this government it is the big end of town, the international marketplace, that counts.

The government will engage all the public resources necessary to ensure that this bank merger proceeds quickly and all in the name of increased profit for reduced costs and less jobs. The government's role in such major corporate moves is that of a facilitator, not a protector, of the public interest. In the eyes of the Prime Minister and his Treasurer, the corporate interest is also the national interest and, therefore, narrow corporate goals are being placed ahead of community needs.

While this government's attention, resources and effort is being poured into these issues, many important problems in regional Australia continue to be ignored.

Today I want to highlight one of those issues. Farms in the central highlands of Tasmania have been in the grip of drought for three years. The state government first applied for drought exceptional circumstances assistance for that region around the end of 1998. That application was refused by the government because the Federal Minister for Agriculture considered the supporting rainfall data to be inadequate.

The Tasmanian state government then pursued the claim for assistance based on the more general exceptional circumstances criteria. A submission based on these broader criteria was lodged with the federal minister in August last year. That too was considered to be inadequate and more information was sought.

I pursued the issue further through the estimates hearings in February. I was told that the federal minister had asked the Tasmanian government for yet more information in December last year. I was told there was also a meeting of state and Commonwealth officials and farmers to discuss this application in Hobart on 19 January. I also understand a further submission from the state will be lodged in a day or so. So in sharp contrast to the priorities afforded to bank mergers, the assessment of an application for help for farmers who have been stricken by drought since mid-1997 drags on and on.

Once this further submission or amended submission is lodged, it will then have to go to the National Rural Advisory Council for assessment but it will first have to be vetted by the minister. Rather than refer the Tasmanian submission to the National Rural Advisory Council for independent assessment by properly qualified people at arm's length from the political process, it will be Mr Truss who will make the decision as to whether or not any independent assessment will proceed.

As I understand the normal process, any application for this type of assistance is first assessed by the National Rural Advisory Council. The council in those circumstances would then make a recommendation to the minister that he may accept or reject.

I would like to illustrate this political flexibility by referring to an application for help from farmers in the north-west of New South Wales and southern Queensland. Their problem was flooding and excessive rainfall in the spring of 1998. The then RASAC found that the application did not meet the exceptional circumstances criteria and recommended to the then minister, Mr Vaile, that approval for help not be granted. Mr Vaile accepted that advice but said in a media release dated 28 May 1999:

While exceptional circumstances is not appropriate, the Federal member for Gwydir, John Anderson, has convinced the government that some assistance is warranted in relieving this hardship and this will be provided by ex gratia payments.

I do not want to comment on the merits of that claim and the decision but I ask the minister to take the same flexible approach to the application from the central highlands of Tasmania as that taken in response to the claim from farmers in Mr Anderson's electorate. Both groups are entitled to fair treatment. The fact that there has been an assessment of this application by Mr Truss before it is referred to the NRAC also means that at best a decision is months away. While this debate about rainfall percentiles and actual or theoretical pasture growth in the central highlands of Tasmania drags on, the region's economy continues to deteriorate and, along with it, the fabric of the community itself.

Farmers in the central highlands of Tasmania are now starting to shoot sheep who are badly wasted by the prolonged drought, and they are simply throwing them into pits. Tragically, at least one farmer has taken his own life. These sheep have little value because of their condition and, because of the cost of transporting them for slaughter, sale cannot be justified. Not only has the prolonged drought impacted directly on farmers' incomes, it has also had a significant impact on the value of properties in the region. I have a copy of a letter written by the Central Highland Council to an officer in the state Department of Primary Industries. The letter relates to the state's application for exceptional circumstances and is dated 7 March this year. The letter quotes a Westpac branch manager as saying:

No financiers are keen to see properties on the market as their failure to attract buyers because of the drought will devalue all others in the area even further.

According to the letter, advice from a Webster's Rural Real Estate employee with some 49 years experience indicates that rural properties in the central highlands are now worth 30 per cent to 40 per cent less than they were before the drought. According to Webster's real estate—I must say that company is well placed to make such a judgment—this devaluation can be attributed to the drought directly. It is the view of that council that the approaching winter is shaping up to be worse than all others. There is no sign of autumn rain and no cover on the ground. According to the council, the weather bureau is indicating that no appreciable rain is expected before the end of April and by then frosts will be setting in and this will end any useful growth.

The council advises that destocking in the highlands continues and prices received are well down on average and barely covering transport and production costs. This region is now carrying half the number of sheep it carried. As I said earlier, many farmers now find the value of their sheep and their condition so poor that the only sensible option is to destroy them and dump them in pits. The council warns that if these trends continue, equity in properties in this region will continue to fall and management of these properties will become impossible due to lack of funds.

So the haste with which the government is seeking to progress the merger of the Commonwealth Bank and the Colonial Bank may well further increase the burden on these central highland farmers. The marriage of these banks will inevitably lead to a reduction in banking competition in Tasmania. Combined with declining farm values and declining equity, this lack of competition within the banking sector paints a grim picture if direct and immediate assistance by way of an exceptional circumstances declaration is not forthcoming.

Farmers may well be faced with more limited banking options and will be forced to take whatever they can get and pay whatever price is demanded for farmers. The least this government can do is to give the application for assistance from these farmers the same attention it is currently giving to the application from the Commonwealth Bank of Australia to take control of Colonial. The minister should also treat this application with the same flexibility afforded to the exceptional circumstances application from Mr Anderson's constituents in the north-west of New South Wales. The Howard government should ensure that the central highlands community does not suffer, along with similar constituencies elsewhere in Tasmania and New South Wales, from reduced banking services and local job losses as a result of the Commonwealth-Colonial banks merger. Surely that is not too much to ask.

Sitting suspended from 1.53 p.m. to 2.00 p.m.